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Green innovations and environmentally friendly technologies: examining the role of digital finance on green technology innovation

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Abstract

The digital finance created by technological empowerment has a significant impact on the inventive behavior of micro-enterprises. This paper uses a correlation analysis that combines the fixed effect model (FE) and the panel threshold model (PTM) to evaluate the impact of digital financing on the quantity and quality of innovation in green technology. In addition, its process is dissected in this work with respect to resource limitations and financial expenditures. The empirical evidence demonstrates that the use of digital financing considerably increases both the rate and quality of innovation in environmentally friendly technologies. Further, the effect of user engagement on green innovation is dynamically overlaid and accumulates over time, as opposed to the coverage of digital finance and digital services. In terms of ownership, growth cycle, and company size, digital finance may assist remedy the misallocation of financial resources and further drive inclusive green innovation. Based on the examination of underlying mechanisms, it is clear that digital finance may play a significant role in fostering innovation in environmentally friendly technologies by easing financial limitations and decreasing associated costs. Depending on the context, “quantitative change before qualitative change” describes the dynamic development process of green innovation fueled by digital finance. This paper proposes that the combination of technological innovation and digital financial services should focus on establishing an inclusive digital financial service system, fostering diverse financial forms, and enhancing the market environment for digital financial services.

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Authors and Affiliations

  1. Shanghai Industry and Commerce Foreign Languages College, Shanghai, 201399, China

    Yi Cai

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YC: conceptualization, investigation, methodology, formal analysis, visualization, and writing the original whole paper.

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Cai, Y. Green innovations and environmentally friendly technologies: examining the role of digital finance on green technology innovation. Environ Sci Pollut Res 30, 124078–124092 (2023). https://doi.org/10.1007/s11356-023-31094-3

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